Frustration mounting over budget uncertainty

A month and a half into fiscal 2014 -- and only months from a financial accountability deadline -- tensions are mounting at the Defense Department and on Capitol Hill amid a budgetary tug of war.

A sense of uncertainty hangs over the Pentagon as a second round of sequestration looms on top of previous aggressive spending cuts. The situation is forcing officials to prepare for a variety of contingencies and frustrating planning throughout the department, DOD Comptroller Robert Hale said Nov. 14 at the Defense One Summit in Washington.

"At the moment, we don't have a choice" about budgetary uncertainty, Hale said. "We have to look at a range of options. There's uncertainty not only about [fiscal 2015] but also '14, and we're a month and a half in. Accepting or understanding it's there is different than saying it's OK. It's damaging and makes planning less effective."

At least some of that planning involves the establishment and delivery of a statement of budgetary resources that former Defense Secretary Leon Panetta ordered be prepared by 2014. That deadline to straighten out the Pentagon's books is followed by another in 2017 to have the entire department audit-ready.

Hale said, as he has in the past, that he was hopeful about meeting the deadlines, but his words were tempered with hesitation.

"It's too early to know for sure, but I think we will meet the deadlines for most financial statements," he said. "As a whole, the department is a ways off, but we would like to show some near-term progress."

One of the leaders in getting the department's financial management in order, DOD Deputy Chief Management Officer Elizabeth McGrath, was more optimistic. Although she plans to step down from her job by Nov. 30, McGrath expressed confidence in efforts she believes are changing the way the department does business.

"In the warfighting space, you absolutely have to have standards to be able to communicate," McGrath said. "It's the exact same thing on the business side. What are our investments that we're making? What standards do we have? Are they any good? Who is using them? This is an opportunity to change how we execute the business of defense and the costs of defense. How do we optimize what we do? We really do think it's an opportunity to not only optimize but simplify the processes that we use."

But during a congressional panel discussion at the event, lawmakers accused the Pentagon of arrogance and wasteful spending and criticized leaders' ability to manage costs.

"DOD doesn't know what it costs to make soldiers, Marines or sailors. It simply doesn't know," said Rep. Duncan Hunter (R-Calif.), a member of the Armed Services Committee and a former Marine Corps officer. "They either have not done the research or they aren't being forthcoming with Congress."

"I don't remember myself or other senior officials ever turning down requested meetings with members of Congress," Hale said. "We certainly testify frequently. Some of them may, frankly, not like the answers they're hearing. There are two parties on the Hill and they don't always agree, so I think at times the party that doesn't get the information they want to hear is frustrated."